The New Yukon Gold Rush

From 1897-1900, the Yukon Territory was the site of one of the most famous gold rushes in history. One hundred and twenty years later, rich strikes by junior gold mining companies in the Yukon have revealed that some of the largest gold deposits in the world.

This new bonanza has attracted the attention of the world’s largest mining companies and heralds the start of the new Yukon Gold Rush.

The Klondike Gold Rush

The news of rich gold deposits in Canada’s Yukon Territory electrified the world in 1897. Over the next ten years, the Klondike Gold Rush saw tens of thousands of miners wrest 4 million ounces of gold from the frozen ground.

Mechanized operations took over when the gold panners left, fighting the permafrost to follow the gold veins underground. After 1924, when only 30,000 ounces were produced in the entire territory, large scale mining operations ceased.

The New Yukon Gold Rush

The last ten years have seen a new Yukon Gold Rush unfold. While activity in the Klondike area of the Yukon Territory heated up when gold began its rise to peak at $1900 in 2011, the following bear market convinced many speculative operations to scale back or sell out.

There were some exploration companies who kept at it, and they have uncovered riches untold of just 10 years ago. The success of these small gold exploration companies has attracted the attention of the world’s largest gold miners, who are eager to replenish their holdings of untapped deposits.

These are just some of those acquisitions that have ignited the new Yukon gold rush.

Goldcorp

Goldcorp, the world’s third-largest gold miner, began the New Yukon Gold Rush among mining majors last May, when it purchased all outstanding shares of Kaminak Gold for $522 million. Kaminak’s Coffee project in the Yukon has total indicated gold resources of 3 million ounces, and is expected to produce 200,000 ounces of gold a year at an all-in sustaining cost of $550 per ounce once it enters production.

The next month saw Goldcorp buy a 19.9% interest in Independence Gold, which owns claims next door to the Coffee project.

Noting the other big players in the gold mining sector moving into the Yukon, Goldcorp opened the checkbook again this March, spending $6.3 million to take a 19.9% stake in Triumph Gold’s Freegold Mountain operation. This claim borders several other high-grade projects. Triumph’s CEO says that the deal is enough to fund the company’s exploration plans for the next two years.

Agnico Eagle

Last December, Agnico Eagle got in on the ground floor of a promising new Yukon gold mining venture, when it purchased 19.93% of White Gold Corp for $14.52 million. The company will also pony up $15 million to continue exploration work. The 12,300 claims owned by the company, which comprise around 30% of the profligate White Gold district, previously belonged to famous Yukon gold prospector Shawn Ryan, who received $3.5 million and 7 million shares in the new company.

Newmont

Goldstrike (not to be confused with Barrick’s Goldstrike mine in Nevada) was a pioneer in discovering the recent string of high-grade gold deposits in the Yukon. The company was the first to file claims and prospect the Plateau area, back in 2012. The impressive results from test bores in several areas of the project caught the attention of gold mining giant Newmont, the world’s second-largest gold producer.

Last month, Newmont inked a $39.5 million deal to take on most of the exploration expenses in return for up to 80% ownership in Plateau East. In addition to an initial purchase of $4.5 million worth of Goldstrike stock (giving Newmont a 20% stake in the company) and $6 million in cash, Newmont must spend $13 million for exploration in the Plateau project to earn at 51% stake in the project. By spending another $16 million in exploration expenses and paying for a feasibility study, the company gains another 24% ownership in the operation.

Goldstrike plans to use the initial $10.5 million from Newmont to develop its wholly-owned Lucky Strike project in the same area.

Barrick Gold

Speaking of Barrick, the world’s largest gold company entered the Yukon sweepstakes this month. This means that the top four gold mining companies in the world now have stakes in the Yukon. On April 10, Barrick announced a series of agreements with ATAC Resources, which is developing three sites in Rackla district, the only know Carlin-style deposits in the Yukon Territory.

In addition to an initial $8.3 million to double its stake in ATAC to 19.9%, Barrick promises to spend $35 million over the next five years to support exploration in ATAC’s Orion project, sited in the middle of the Rackla district. This expenditure will result in a 60% interest in the Orion project for Barrick. By spending an additional $10 million on exploration on Orion, Barrick will gain another 10% ownership stake in the project. With other agreements, Barrick’s total investment in ATAC could reach as high as $63.3 million.

It’s A New Day In The Yukon

Residents of the Yukon are happy to see the influx of highly-paid jobs, in a territory where 40% of the workforce is employed by local, First Nation, and territorial governments.

Ranj Pillai, Yukon’s minister of Energy, Mines and Resources, is excited to have all the “big dogs” investing heavily in the territory. “It should be a very exciting exploration season,” says Pillai

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.